Self-Storage REITs Release Financial Results for First-Quarter 2024

The four largest publicly traded, U.S.-based self-storage real estate investment trusts (REITs)—CubeSmart, Extra Space Storage Inc., National Storage Affiliates Trust (NSAT) and Public Storage Inc.—have released financial statements for the quarter that ended March 31. In general, the companies indicated slight decreases in funds from operations (FFO) and net operating income (NOI), but reported stable occupancy.

“Our team performed well in what remains a challenging operating environment characterized by continued pressure on street rates and significant competition to attract new customers,” said David Cramer, president and CEO of NSAT. “Rental volume and occupancy are increasing from the seasonal trough in February, but the next few months will be key determinants of full-year performance.”

Joe Russell, CEO and president of Public Storage, expressed similar sentiments. “With first-quarter performance in line with our expectations, the Public Storage team is encouraged as we approach the busy season,” he said “Our view is supported by positive trends in customer behavior and waning deliveries of competitive new supply across the country.”

CubeSmart

CubeSmart reported FFO per share of $0.64 for the first quarter of 2024, down from $0.65 last year. Same-store NOI at its 598 facilities decreased 1.9% year over year. The company attributed this to a 5% increase in operating expenses. Revenue increased $4.9 million, while property operating expenses rose $5.9 million compared to the same period in 2023.

Same-store physical occupancy was 90.4% as of March 31, down from 91.9% in 2023. The company’s total-owned portfolio, representing 613 facilities and 44.4 million square feet of rentable space, had a physical occupancy of 90.4% at the end of the quarter.

During the quarter, CubeSmart acquired a two-property portfolio in Connecticut for $20.2 million. It also added 68 facilities to its third-party management platform. The company has four joint-venture developments under construction in New Jersey and New York.

On March 18, CubeSmart declared a dividend of $0.51 per common share. It was paid on April 15 to common shareholders of record on April 1.

CubeSmart owns or manages 1,425 self-storage facilities across the United States. Its operating portfolio comprises about 90.7 million square feet.

Extra Space Storage

Same-store revenue at Extra Space increased 1% and NOI decreased by 0.5% in the first quarter of 2024, compared to the same period in 2023. Core FFO, excluding adjustments for non-cash interest, was $1.96 per diluted share, a 3% decrease over the previous year. Same-store occupancy was 93.2% as of March 31 compared to 92.7% a year prior.

During the quarter, the company acquired five existing facilities and another at Certificate of Occupancy for a total of $35.1 million. In conjunction with a joint-venture partner, Extra Space completed one development for a total cost of $20.4 million, of which it invested $19.4 million. It also added 97 properties to its third-party management platform.

Extra Space paid a quarterly dividend of $1.62 per common share, which was the same as the previous year. It was paid on March 29 to common shareholders of record on March 15.

Headquartered in Salt Lake City, Extra Space owns or operates more than 3,714 self-storage facilities nationwide under the Extra Space, Life Storage and Storage Express brand names. The company’s properties comprise approximately 2.6 million units and 283 million square feet of rentable space.

National Storage Affiliates Trust (NSAT)

NSAT reported that net income increased $54.7 million for the first quarter of 2024 as compared to the same period in 2023. It was primarily from the sale of 39 self-storage properties.

The company reported a decrease in same-store NOI of 3.7% for the first quarter of 2024, compared to the same period in 2023. It was driven by a 1.5% decrease in same-store total revenue and an increase of 4.5% in same-store operating expenses.

Core FFO per share was $0.60 during the first quarter, a decrease of 9.1% compared to the first quarter of 2023. NSAT reported diluted earnings per share of $0.65, compared to $0.24 a year ago. As of March 31, same-store occupancy was 85.9%, a decrease of 350 basis points from the year prior.

On Feb. 15, the company declared a quarterly dividend of $0.56 per common share, representing a 1.8% increase from the first quarter 2023. It was paid on March 29 to holders of record on March 15.

Headquartered in Greenwood, Colorado, NSAT is a self-administered, self-managed REIT focused on the acquisition, operation and ownership of self-storage properties within the top 100 U.S. Metropolitan Statistical Areas. The company has interests in 1,050 self-storage facilities in 42 states and Puerto Rico comprising about 68.6 million rentable square feet. It's owned by its affiliate operators, who are contributing their interests in their self-storage assets over the next few years as their current mortgage debt matures.

Public Storage

Revenue for same-store facilities at Public Storage increased 0.1%, or $0.6 million, compared to the same quarter in 2023, due primarily to increased higher realized annual rent per occupied square foot, partially offset by a decline in occupancy. Operation costs for same-store facilities rose 4.8%, or $10.9 million, compared to the previous year. This was mainly attributed to increases in property taxes and marketing expenses.

FFO was $4.03 per diluted common share compared to $3.94 for the same period of 2023, marking a 7.6% increase. NOI increased $25.1 million, which was driven by a $35.4 million increase in same-store facilities and a $10.3 million decrease from other non-stabilized stores.

During the quarter, Public Storage acquired four self-storage facilities in four states comprising 300,000 rentable square feet for $34.6 million. The company also opened one location and completed various expansion projects, adding 300,000 net rentable square feet to its portfolio for $35 million.

The company reported a regular common quarterly dividend of $4.03 per common share. It also declared dividends with respect to various series of preferred shares.

Based in Glendale, California, Public Storage has interests in 3,044 self-storage facilities in 40 states, with approximately 218 million net rentable square feet. It holds a 35% interest in Shurgard Self Storage Ltd., which has 275 facilities in seven European countries, with approximately 15 million net rentable square feet.

Sources:
CubeSmart, CubeSmart Reports First Quarter 2024 Results
Extra Space Storage, Extra Space Storage Inc. Reports 2024 First Quarter Results
National Storage Affiliates Trust, National Storage Affiliates Trust Reports First Quarter 2024 Results
Public Storage, Public Storage Reports Results for the Three Months Ended March 31, 2024